Stonegate weighs £1bn sale of 1,000 pubs as debt pressures deepen

Britain’s largest pub operator is examining the potential sale of more than 1,000 venues in a move that could reshape the country’s pub landscape. Stonegate Group, owner of Slug & Lettuce, Be At One and several thousand other sites, has opened discussions with advisers as it seeks to reduce a debt pile exceeding £3bn.  

A strategic review driven by financial strain

The proposed disposal centres on Stonegate’s “platinum” portfolio, a collection of 1,034 pubs regarded internally as some of the company’s strongest assets. Early reports suggest the package could raise up to £1bn. Industry sources say the portfolio’s structure would allow Stonegate to sell these pubs without disrupting the wider group.

This latest move reflects long-running efforts to stabilise the business following its 2019 takeover of Ei, a £3bn acquisition completed just months before pandemic restrictions forced sustained closures across the sector. The deal elevated Stonegate to the position of the UK’s largest pub landlord but left the business highly leveraged at the most challenging period for modern hospitality.  

A previous attempt to sell a similar number of pubs in 2023 did not progress. Instead, the platinum portfolio was securitised through a £638m loan from Apollo, which locked Stonegate into a non-call period preventing any restructuring or sale of the assets until January 2026. That restriction is now nearing expiry, prompting the renewed review.  

Rising costs and sector headwinds

Stonegate’s financial pressures have intensified during a period marked by rising interest rates, increased energy costs and higher labour bills. The company reported a £214m loss in 2024, with finance costs alone reaching £455m in the year to September.  

The wider hospitality sector is also navigating higher wage costs due to increases in the minimum wage and employers’ national insurance contributions, challenges frequently cited by pub owners nationwide. Slower footfall caused by wet weather, cost-of-living pressures and transport disruption further weighed on trading performance, according to Stonegate chief executive David McDowall.  

Despite these hurdles, Stonegate generated revenues of £1.7bn in 2024. It has continued to invest in key brands, including a £1.3m refurbishment programme for Slug & Lettuce as part of its 40th anniversary celebrations. The group has also been converting several hundred managed sites into leased or tenanted operations, a strategy it says delivers notable profit increases.  

Options on the table

Executives are exploring whether to sell the pubs as a single package or in several large tranches, a structure that analysts say could attract a wider pool of investors, particularly private equity firms.  

All the sites earmarked for potential disposal are freehold, located across England and Wales, and collectively generate around £90m in annual EBITDA. Their freehold status is expected to draw strong interest from asset-focused buyers.

The company has already begun selling smaller groups of pubs, including 23 venues placed on the market in September.  

Implications

If enacted, the sale would represent one of the largest pub disposals in years, echoing previous waves of restructuring that have reshaped the UK pub market. For hospitality operators including fish and chip businesses, a large-scale transfer of ownership raises questions about local competition, potential changes in supply chains and the strategic direction of landlords.

Many pubs serve as anchors for high-street footfall and shared customer bases, meaning changes in ownership or investment levels could influence trading patterns in surrounding businesses. Analysts also note that major consolidations often precede shifts in pricing strategies, tenancy terms and local market dynamics.

For now, Stonegate insists no decisions have been made. But with debt pressures mounting and the January refinancing window approaching, industry observers expect further developments within weeks.